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What is Escrow?

An escrow is created when money and/or documents are deposited by two or more persons with a third party which are to be delivered upon the happening of certain conditions. The third party is known as the escrow agent or escrow holder.

The authority given to an escrow holder is strictly limited by instructions provided by the parties involved. Consequently, an escrow holder acts on mutual instructions deposited into escrow and DOES NOT represent any party. The escrow officer is authorized by instructions to allocate funds for items during the escrow period, such as real estate commissions, title insurance, liens, recording fees, and other costs. Instructions also specify the method of collecting funds, proration issues, time limitations, and all the terms of the transaction. The escrow process protects all parties involved by retaining money and documents until the mutual instructions are met.

Courtesy of First American Title Insurance Company

What is Title Insurance?

Title insurance provides coverage for certain losses due to defects in the title that, for the most part, occurred prior to your ownership. Title insurance protects against defects such as prior fraud or forgery that might go undetected until after closing and possibly jeopardize your ownership and investment.

Prior to the development of the title industry in the late 1800s, a homebuyer received a grantor’s warranty, attorney’s title opinion, or abstractor’s certificate as assurance of home ownership. The buyer relied on the financial integrity of the grantor, attorney, or abstractor for protection. Today, homebuyers look primarily to title insurance to provide this protection. Title Insurance companies are regulated by state statute. They are required to post financial guarantees to ensure that any claims will be paid in a timely fashion. They also must maintain their own “title plants” which house duplicates of recorded deeds, mortgages, plats, and other pertinent county property records.

Courtesy of First American Title Insurance Company

What to Expect at Your Signing

As you near the end of your transaction, and when Escrow has received and prepared the required documents, you will be contacted to set an appointment for you to review, approve and sign your documents. This portion of your transaction is referred to as “the signing” and will usually occur a few days prior to your actual close date.

This Instructional Video will prepare you for what to bring and what you can expect at your signing.

Courtesy of First American Title Insurance Company

Buyer Information Request Form

The Buyer Information request form is a very important document to your Escrow Officer. It informs them as to whom they should contact or who should contact them withregards to your loan.

Secondly this form notifies the Escrow Officer if there will be a 1031 Exchange as part of thetransaction. Lastly, this form instructs Escrow where to send any closing documentation after the transaction has closed.

Courtesy of First American Title Insurance Company

Vesting Instructions and Amendments

The completion and accuracy of this form is very important. This will indicate to the Escrow Officer or Title Officer how title will be held to the property.

“How you hold title to your property can have serious tax consequences. It is strongly recommended that you seek tax and / or legal counsel when completing this form”. The Escrow Officer or Title Officer will not be able to advise you on the completion of this document.

Courtesy of First American Title Insurance Company

Overview

HOMESMART
3131 E Camelback Road Suite 125 • Phoenix, AZ 85015
Office 602-230-7600 • Mobile (602)469-3253